Lawmakers Push Crypto Trading Ban to Curb Pardon-Linked Corruption

Rep. Ro Khanna (D-Calif.) has introduced a resolution to prohibit the president, their family, and members of Congress from trading cryptocurrencies or accepting foreign funds, citing concerns over political corruption tied to the crypto industry a BeinCrypto report. The proposal follows President Donald Trump's controversial pardon of Changpeng Zhao, the convicted founder of Binance, which has drawn sharp criticism from Democrats and raised alarms about conflicts of interest, the BeinCrypto piece reports.

Khanna, a vocal advocate for cryptocurrency innovation, argued that Trump's pardon of Zhao—granted despite the latter's 2023 guilty plea for enabling money laundering—exemplifies a "corruption" that enriches the president and his family, according to a Benzinga piece. "We have a president who is enriching himself and his family in an obscene wealth that is unprecedented in American history," Khanna stated on MSNBC, highlighting Zhao's post-conviction investment in World Liberty Financial, a Trump-backed stablecoin venture, the Benzinga report added. The resolution aims to sever financial ties between lawmakers and the crypto sector, a move Khanna framed as necessary to restore public trust.

The pardon of Zhao, a foreign national who spent four months in prison after a $4.3 billion settlement with U.S. regulators, has become a flashpoint in the debate over crypto's influence in politics, according to a Bloomberg report. The Biden Justice Department had sought a three-year prison sentence for Zhao, who was convicted for Binance's role in facilitating illicit transactions linked to terrorist groups, Politico reported. Trump's administration, however, defended the pardon as a rebuke of the "war on crypto," with White House officials claiming Zhao was unfairly targeted, Wired wrote. Binance's subsequent lobbying efforts, including a $450,000 payment to a firm connected to Trump's son, Donald Trump Jr., further fueled accusations of quid pro quo, NBC News reported.

Democratic lawmakers have been among the most vocal critics. Sen. Elizabeth Warren (D-Mass.) condemned the pardon as an example of "corruption," warning that Trump's crypto ties risk enabling "lawlessness." Warren and Sen. Adam Schiff (D-Calif.) introduced a Senate resolution to formally condemn the pardon, citing Binance's financial ties to World Liberty Financial and the 15% surge in WLFI's token price post-pardon as evidence of profiteering, according to a Benzinga report. Meanwhile, Rep. Maxine Waters (D-Calif.) accused Trump of legitimizing "crypto crime," arguing that his pro-crypto agenda prioritizes personal gain over public interest, a point outlined in coverage by Benzinga.

The push for legislative action comes as the U.S. grapples with broader crypto regulation. Coinbase CEO Brian Armstrong expressed optimism that bipartisan crypto legislation, such as the CLARITY Act, could pass by year-end, despite concerns over DeFi oversight, in what was described in a Benzinga interview. However, critics like Summer Mersinger of the Blockchain Association warn that rushed regulations could stifle innovation, a concern noted in a Coinpedia report.

Internationally, Australia's crypto adoption rate reached 31% in 2025, outpacing the U.S. as stablecoins processed $46 trillion in transactions, according to a CryptoNews report. Yet, security concerns persist, with Immunefi CEO Mitchell Amador cautioning that "hack rates" must drop below 1% for stablecoins to gain mainstream credibility, the CryptoNews piece added.

Khanna's proposal faces an uphill battle in a Republican-controlled Senate, but it underscores growing scrutiny of crypto's political influence. As Trump's ties to the industry deepen—his campaign has received millions in crypto donations and his family's stablecoin venture has generated $4.5 billion in revenue—the debate over ethics, regulation, and financial conflicts of interest shows no sign of abating.